THINK WISE, BUY RIGHT & SIT TIGHT

I personally believe that to do something perfectly , one should simply know what not to do while  doing that something. If you are very clear about the hurdles, you will by-pass them and do the task in an enhanced way. When trading, there are also certain fingertips or the thumb rules that one must stick to and we will see it does wonders. I will quickly count some of the "Not-to-do" mistakes while trading or investing and also make you aware of certain interesting facts.

Few amazing principles to boost your trading:-

• THUMB RULE :::- NEVER END YOUR INVESTMENTS IN A LOSS AND IF IT'S AN INTRADAY TRADE, MAINTAIN A STRICT STOPLOSS.
• NEVER BUY OR SELL A STOCK WHEN IT IS MAKING FRESH LOWS OR HIGHS RESPECTIVELY.
• DO NOT EXCEED THE PURCHASE VALUE MUCH MORE THAN THE CAPITAL AVAILABLE WITH YOU FOR TRADING. NOT FOLLOWING THIS RULE MAY INCUR SEVERE LOSSES AND MAY EVEN WIPE OUT YOUR EARLIER PROFITS AS WELL AS SOME PART OF YOUR INITIAL CAPITAL. 
• USE THE CONCEPT OF AVERAGE NOT TO END IN A LOSS BUT TO END PROFITABLY.  IN SIMPLE WORDS, AVERAGE TO PROFIT AND NOT TO REDUCE YOUR LOSSES.
• IN A BULLISH MARKET, DON'T TAKE A SHORT POSITION (ESPECIALLY IN AN INTRADAY TRADE, IF YOU STILL WANT TO EXPERIMENT USE THE  "FUTURES" OPTION)
• AFTER EVERY BULLISH RUN OF 100-200 POINTS IN NIFTY (NSE), WAIT FOR THE CORRECTION TO TAKE PLACE AND THEN CREATE POSITIONS.
• IN A BEARISH MARKET, NEVER LONG POSITIONS UNLESS U FEEL ITS THE RIGHT ENTRY POINT. (SUPPOSE NIFTY IS DOWN 20 POINTS @11AM, WAIT TILL 3:15PM ATLEAST TO TAKE A LONG POSITION FOR A BTST TRADE OR A SWING TRADE).
• INVEST IN COMPANIES WITH SOUND FUNDAMENTALS, STRONG MANAGEMENT AND MINIMUM DEBT. REMEMBER A LOAN OR A DEBT IS NEVER CONSIDERED AN EARNING. IT IS TO BE PAID BACK TO THE LENDER ALONG WITH AN EXTRA SUM OFTEN KNOWN AS INTEREST.
• NOBODY IN THIS WORLD UNDERSTANDS THE MARKETS COMPLETELY. IF SOMEBODY CLAIMS HE DOES, HE IS SURE TO BE THE NEXT WARREN BUFFET.
• RETAIL INVESTORS LIKE ME & YOU CAN'T MAKE THE MARKET MOVE IN EITHER DIRECTION BUT WHAT WE CAN DO IS FOLLOW THE BIG BOYS VERY CLOSELY AND BUY SOMETHING WHEN THEY BUY AND SELL SOMETHING WHEN THEY SELL. BY DOING THIS, IF THE BIG BOYS ARE MAKING BILLIONS; WE CAN ATLEAST MAKE MILLIONS.
• NEVER TRADE OR INVEST WITH THE BORROWED MONEY UNLESS YOU ARE TOO CONFIDENT OF YOUR TRADING SKILLS.
• SWING TRADE (1-15 DAYS) IS THE BEST TYPE OF TRADING THAT SUITS THE INDIAN MARKETS.
• BOOK PROFITS WHENEVER YOU HAVE A PROFIT LYING ON THE TABLE. EVEN IF YOUR MIND DOESN'T LET YOU DO SO, AT LEAST TAKE A STOPLOSS AT SOME DECENT LEVEL COVERING YOUR PROFIT REGION SO THAT AT THE END OF THE DAY YOU DON'T END IN LOSS. eg. YOU HAVE 100 SHARES OF COMPANY xxx @INR X. IT ROSE TO X+5. YOU DIDN'T BOOK PROFITS AND IT CAME DOWN TO X-15 IN THE DAY TRADE. WHEN YOU END YOUR DAY, IT WILL SHOW SOME INR 1500(-) MTM INSTEAD OF A INR 500 PROFIT FOR THAT PARTICULAR TRADE. ALSO YOU WILL END UP PAYING A BROKERAGE FOR INVESTMENT INSTEAD OF A BROKERAGE FOR INTRADAY TRADE.

          BROKERAGE DIFFERENCE:-

          INVESTMENT BROKERAGE= 10 * INTRADAY BROKERAGE

• LOOK FOR QIP (QUALIFIED INSTITUTIONS PLACEMENT) OF SOME VERY GOOD COMPANIES. THEY ARE QUICK BOOST TO YOUR PORTFOLIO. eg. THE BEST EXAMPLE IS OF "YES BANK GLOBAL QIP" DATED 5TH JUNE, 2014 WHICH WAS OVERSUBSCRIBED (5 TIMES THE AMOUNT THEY WANTED).
• STOCK SELECTION IS VERY IMPORTANT. REMEBER NOT EVERY STOCK RISE IN THE RISING MARKET AND ALSO NOT EVERY STOCK FALL IN THE FALLING MARKET.
• THERE IS NO PLACE FOR YOUR "EMOTIONS & FEAR" IN THE MARKET.
• IF YOU ARE TRADING FOR MAKING A PROFIT OF INR x, PLEASE BE PREPARED FOR A LOSS OF INR x TOO.
• THERE IS NOTHING KNOWN AS "TIPS FOR TRADING" IN THE MARKET. HAD IT BEEN THE CASE, MOST OF THE PEOPLE WHO LOVE TO TALK ABOUT MARKET ON PUBLIC FORUMS WOULD HAVE BEEN MAKING HUGE MIONEY (THEIR WEALTH GENERALLY EXCEEDS CRORES IN SOME OR THE OTHER FORM & BY THE RULE OF 50-60% ON INVESTMENTS & 100-120% ON INTRADAY TRADES) BUT THAT'S NOT THE TRUE CASE.
• LISTEN TO RECOMMENDATIONS FROM BROKERAGE HOUSES BECAUSE THEY CARRY SOME SENSE BUT PLEASE DON'T BLINDLY COPY THEM. MODIFY THEIR TRADING RECOMMENDATION ACCORDING TO YOUR PORTFOLIO (CHANGE THE BUYING PRICE, STOPLOSS, TARGET PRICE).
• THE FASTEST & THE SMARTEST WAY TO MAKE MONEY IS TO TRADE FUTURE. BROKERAGE IS SAME AS THAT OF INTRADAY TRADE (LOW BROKERAGE) AND CAN BE KEPT FOR A PERIOD OF 30 DAYS. NIFTY PERMITS 144 COMPANIES TO BE TRADED IN FUTURE. THIS ALSO INVOLVES A VERY SMALL MARGIN TO PURCHASE LARGE QUANTITIES (FIXED LOT SIZE) OF SHARES. eg. IF YOU WANT TO PURCHASE 125 SHARES (LOT SIZE OF SBI) OF SBI, YOU WILL END UP PAYING INR 342875; THE SAME CAN BE PURCHASED IN FUTURE BY PAYING INR 64554 (ONE-FIFTH OF THE TOTAL PRICE). THE ONLY PROBLEM THAT ARISE IN TRADING FUTURE IS "MTM" & "30 DAY BOUNDATION".
• IT IS ALWAYS ADVISABLE TO PLAY A GAME THE RULES OF WHICH ARE CRYSTAL CLEAR TO US.
• MONEY IS PRECIOUS, HARD-EARNED; DON'T LOSE IT.
• NOT EVERY DAY IS A BUYING OPPORTUNITY; WAIT FOR THE RIGHT TIME TO ENTER THE MARKET.

THINK WISE, BUY RIGHT & SIT TIGHT.

Disclaimer :

I may or may not have holding in the stocks I have mentioned. The mention above is purely advisory in nature and is not binding on any reader.

HAVE A GOOD DAY !!!